Bed Bath & Beyond surges for day three of meme stock rally

Jan 11 (Reuters) – Shares of Bed Bath & Beyond (BBBY.O) surged on Wednesday as individual investors crowded in, extending the stock’s rebound from the multi-decade lows hit last week and reigniting a rally in other meme actions.

Among the top three companies listed on Fidelity’s retail platform, Bed Bath & Beyond jumped 69% during the session and then another 20% after the bell. Including these late gains, it has more than tripled so far this week.

Other popular stocks among retail traders also rose, with GameStop (GME.N) up 7% and AMC Entertainment (AMC.N) up 21%.

On Tuesday, Bed Bath & Beyond said it would lay off more staff to cut costs after reporting a bigger-than-expected quarterly loss.

Shares of the struggling US home goods retailer hit their lowest level since the early 1990s last week after the company announced plans to explore options including bankruptcy.

Short-term interest in Bed Bath & Beyond is $82.7 million, or 52.07% of its float, analyst firm S3 Partners said in a research note.

S3 Partners said retail investors are mostly betting the stock will rise, while bets against the company are mostly placed by large institutional investors, setting the stock up for volatile trading.

“If bankruptcy isn’t in BBBY’s future, its rallying price will have short sellers scrambling for the doors to keep some of the market value profits they made in 2022,” he said. writes Ihor Dusaniwsky, general manager of predictive analytics at S3. The partners.

Bed Bath & Beyond’s options volume was nine times greater than typical, based on recent trades, according to data from Trade Alert.

Much of the commercial interest was focused on short-dated options, with contracts expiring on or before January 20 accounting for around 70% of volume.

A sign that traders expect the stock to remain highly volatile in the coming days, the stock’s 30-day implied volatility, an indicator of how far traders expect the stock to swing short-term, was 330%, about the highest in at least four years, according to data from Trade Alert.

In a stock market frenzy nearly two years ago, retail bettors drove shares of Bed Bath & Beyond higher by congregating in online forums, costing bearish hedge funds billions of dollars .

Reporting by Medha Singh in Bengaluru and Saqib Iqbal Ahmed in New York; Additional reporting by Bansari Mayur Kamdar and Amruta Khandekar; Editing by Shinjini Ganguli, Maju Samuel and David Gregorio

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